The net profit of Rainbow and Flagchem soared in 2022, while Guoguang and Lanfeng missed expectations

Recently, Rainbow, Flagchem, Guoguang and Lanfeng have announced their  forecasts of 2022 annual performance

Rainbow 

Rainbow released its 2022 annual performance forecast on January 30. According to the forecast, in 2022, the net profit attributable to the shareholders of the listed company will be 1.45 million ~ 160,000 million yuan, an increase of 81.31% ~ 100.07% compared with the same period last year; The net profit after deducting non-recurring gains and losses was 1.46 million ~ 1.61 million yuan, up 82.96% ~ 101.75% compared with the same period last year.

Reasons for performance change: 

1. During the reporting period, food security concerns caused by the global COVID-19 pandemic and regional tensions contributed to strong global demand for agricultural commodities and sustained high commodity prices. The high price of bulk agricultural products has brought growers to expand the planting area and increase the input of agricultural inputs. The global demand for crop protection products is booming as a whole. The sales volume and prices of the company's main products have increased, and the annual performance has achieved a substantial growth.

2. During the reporting period, all work of the company was carried out in an orderly manner in accordance with the medium-term strategic planning and annual work plan, continued to focus on advanced manufacturing supported by R&D and innovation and further improved the global marketing network, and the progress and quality of all key tasks were better than expected.

Flagchem

 On Jan 30, Flagchem released a preview of its 2022 annual performance. According to the forecast, in 2022, the net profit attributable to the shareholders of the listed company will be 39 million ~ 42 million yuan, an increase of 82.57% ~ 96.62% compared to the same period last year; The net profit after deducting non-recurring gains and losses was 40,000 ~ 430 million yuan, up 99.1% ~ 114.04% compared with the same period last year.

During the reporting period, the company actively explored the market, stabilized the supply chain and effectively organized production. Due to the strong market competitiveness of existing products and strong market demand, export orders increased from the same period last year.

Guoguang

On January 30, Sichuan Guoguang released its 2022 annual performance forecast. The forecast shows that the net profit attributable to the shareholders of the listed company is expected to be 92.7773 million to 124 million yuan in 2022, a year-on-year decrease of 40% to 55%, Basic earnings per share 0.21 yuan -- 0.28 yuan.

Main reasons for performance changes:

The company adheres to the established development strategy, insists on highlighting the core role of technical services, integrates brand resources, overcomes multiple difficulties such as epidemic containment and raw material price increase to actively promote market expansion, and strives to improve product competitiveness. As a result, the operating revenue increases significantly in 2022, but the net profit decreases.

1. The subsidiary Quanfeng controlled by the company this year, was affected by the novel coronavirus epidemic, which restricted the development of production and sales business, resulting in the failure to achieve the annual sales target. Affected by rising prices of raw materials and fluctuations in terminal prices of finished products, gross profit margin of some products decreased year-on-year, resulting in lower than expected earnings in the current period. Therefore, the company conducted an impairment test on the asset group related to goodwill and planned to set aside a goodwill impairment loss of ¥5,948-76.04 million.

2. After Evergrande's financial crisis occurred in October 2021, impairment reserve of about ¥27.26 million was set aside for creditor assets such as debt investment, accounts receivable and notes receivable that occurred with the company in 2021. In view of the fact that Evergrande's debt liquidation has been carried out for more than one year, and there is no clear settlement plan at present, the company will fully reserve for impairment of the remaining ¥13.37 million of debt investment and ¥15.55 million of receivables totaling ¥26.92 million based on the principle of prudence.

3, Affected by the price rise of raw materials, the company's gross profit margin has declined.

 Lanfeng 

Jiangsu Lanfeng released its 2022 annual performance forecast on Jan 30. The net profit loss attributable to shareholders of listed companies in the reporting period was between ¥23,000 and ¥310,000, which was lower than the loss in the same period of last year. The basic EPS loss 0.83 yuan/share -- 0.62 yuan/share.

Main reasons for performance changes:

1. In 2022, affected by the Russia-Ukraine war, inflation in Europe and the United States and the COVID-19 pandemic, the macro-economy was greatly impacted, and the costs of upstream raw materials and energy rose, leading to a decline in the company's profitability.

In accordance with the policy, the company's finance department conducted impairment tests on the properties acquired by the company in 2022. The company preliminarily estimates that there are signs of impairment of the above assets

In 2022, in order to further establish and improve the company's long-term incentive mechanism and attract and retain outstanding talents, the company implemented the equity incentive plan. According to the accounting treatment requirements related to equity incentive, the company increased the relevant expenses by about ¥20 million in 2022.

In December 2020, the Company sold 100% equity of its wholly-owned subsidiary, Shaanxi ARK PHA to Beijing Gikon Rison for ¥450 million. However, in view of the fact that Gikon Rison failed to timely pay the equity transfer payment as agreed in the agreement, the Company shall, based on the principle of prudence, set aside bad debt reserve for the amount that should be recovered.

5. According to the company's future business plan, the company predicts that it will be difficult to obtain enough taxable income to offset the benefits of deferred income tax assets within the loss deductible period stipulated by the tax law in the future, and the company plans to charge back about ¥100 million of deferred income tax assets recognized in previous years, resulting in increased loss range of the company.